Civics and Economics Chapter 8 Lesson 1

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Transcript of Civics and Economics Chapter 8 Lesson 1

Chapter 8: Economic Concepts and Termsdesign by Dóri Sirály for PreziWhat is an economy? The system by which people in a society make decisions about how to use their resources to produce goods and services Scarcity and Choice Scarcity: the basic economic problem - People's resources are limited- Wants will always be greater than the resources to satisfy those wantsResources and Factors of Production- Factors of production: resources used to produce goods and services. 4 types of resourcesProduction and ConsumptionProduction: the use of resources to make goods or provide servicesSupply and DemandLesson 1: Basic Economic ConceptsStandards and ObjectivesStandardsObjectivesCE. 11a- The student will demonstrate knowledge of how economic decisions are made in the marketplace by applying the concepts of scarcity, resources, choice, opportunity cost, price, incentives, supply and demand, production, and consumptionTicket out of the Door1. What is scarcity and how does it relate to resources, choice, and opportunity cost?

2. How does production relate to consumption?

3. What is the law of supply? What is the law of demand? 1. Explain the concepts of scarcity, resources, choice, and opportunity cost and relate it to their lives 2. Describe the factors of production and relate them to consumption 3. Diagram the concept of supply and demand

...Therefore, people need to make choices$10.00 for a basketball game?$ 10.00 for a movie?-Save $10.00?- When you choose one of the choices above, you are giving up the fun you would have had with the other choices; this is known as opportunity cost:- The value of the next best alternative you give up when makinga choice1. Natural resources: land, forests, fish, minerals, sunlight (things occurring in nature)2. Human resources: people's labor to produce goods and services 3. Capital: anything used to make other products (tools, machines, parts) 4. Entrepreneurship: an entrepreneur is a person who starts a business: this person brings together the factors of production to produce a good or service

Consumption: the act of using goods and services Natural Resources(fertile soil, sunlight, rain)Human Resources(the labor of all workers on a farm)Capital (tractor, shovel, and other farm tools)+Entrepreneur (the farm owner)=Production(Tomatoes, corn, vegetables)

Incentives: Things that motivate people and drive economic behavior Incentives www.educanon.com/public/17276/39055- The chance to make a profit is an entrepreneur's incentive for opening a business- Your economic choices are based on incentives as well

- What consumers want to buy are incentives for what producers should sell- Make your own examples of this idea aboveDemand: The amount of a good or servicethat consumers are willing and able to buy at a certain priceSupply: The amount of a good or service that producers are willing and able to sell at a certain pricePrice: The amount of money exchanged for a good or service*Price determines who will buy goods and services*Consumers will buy more of a product at a lower price than at a higher price- Law of DemandProducers will provide more of a product at a higher price than at a lower price - Law of Supply